Key Takeaways
- FTX plans to refund up to 90% of distributable assets to customers in bankruptcy proceedings.
- Actual recovery for customers may be lower than 90% according to some FTX creditors.
- Customers who withdrew over $250,000 before the collapse can pay a 15% fee on those funds to avoid potential clawback.
- FTX customers will receive refunds in dollars instead of crypto, potentially missing out on recent crypto value gains.
- The proposal is expected to be filed in a U.S. bankruptcy court by Dec. 16 after court approval.
Money Recovered Not Equal to Money Owed
FTX founder Sam Bankman-Fried’s criminal trial leads to a plan for customers to recover funds in 2024. The new management plans to distribute 90% of recovered assets to customers, not necessarily 90% of their total losses.
Clawback From Those Who Withdrew Before FTX Failed
FTX seeks more funds by implementing clawbacks, including a 15% fee on withdrawals over $250,000 before the collapse to avoid potential clawbacks.
Opportunity Cost: The Biggest Loss No One’s Talking About
Customers may receive 85% of their cryptocurrency’s dollar value as of November 2022, missing out on potential gains if crypto values have increased since then.
The finalization of the plan depends on negotiations between FTX and its creditors before the December court filing, with potential confirmation in the second quarter of 2024.